At a time when rising incomes, urbanisation and financial awareness are reshaping how Indians invest, experts are increasingly flagging concerns over the lack of liquidity in household wealth and the heavy dependence on traditional assets like property and gold.

Chartered Accountant Nitin Kaushik has questioned the way Indian households allocate their money, pointing to a heavy dependence on physical assets and low liquidity.

Indians have all the wealth but almost none of the liquidity Nitin Kaushik said in a post on social media.

Heavy tilt towards property and gold

Citing data on household assets, Kaushik said 51 percent of wealth is held in real estate and 15 percent in gold. This means 66 percent of household wealth is tied up in physical assets.

In comparison, just 5 percent is invested in equities, while 14 percent is kept in bank deposits.

He noted that only 20 percent of personal wealth in India is in financial assets, which is among the lowest globally. In countries such as the US, Sweden and Taiwan, this share is more than 60 percent.

“The problem isn’t the asset choices, it’s the concentration,” he said, adding that too much exposure to a few asset classes reduces flexibility.

Why liquidity matters

Explaining the issue, Kaushik said assets like property may look valuable but are not easy to use in emergencies.

A 1 crore rupee flat that earns 25,000 rupees in rent gives a yield of about 3 percent, and it cannot be sold in parts.

“You can’t sell 10 percent of your flat if you need money,” he said.

He also pointed out the downside of holding gold in physical form. “Gold in a locker doesn’t compound,” he added.

“At some point, building wealth means owning assets that work for you while you sleep, not assets you have to pray appreciate,” Kaushik said.

Earlier, Value Research CEO had also warned

Value Research CEO Dhirendra Kumar had earlier cautioned investors against putting too much money into gold despite the rally.

Speaking on a podcast on Diwali 2025 investments, Kumar said gold “produces nothing, earns nothing” and advised that it should not form more than a small part of a portfolio.

"Yes, something has changed. Not in my core belief. I have always believed what Warren Buffett kept saying, gold produces nothing, earns nothing, sits pretty, and it appreciates on the anticipation that more people would like to acquire it," he said.

What is driving the gold rally

Kumar said the recent rise in gold prices is largely driven by central banks, not retail buyers.

"Central banks around the world, particularly China, India, Turkey—they went on an acquiring spree not for the sake of sentiment, not because they like gold but to secure themselves. They're doing it for security. The freezing of Russian central bank assets was the biggest trigger. People want to de-risk themselves. This is the de-dollarisation and the scale of demand is unusual," he said.

He added that this global monetary trend has pushed prices higher.

"It is not that the housewife is going to the marketplace and buying that jewelry. That has always been. It will always remain. But the quantum of that is nothing as compared to what the central banks are doing. This monetary stance taken by central banks has led to this surge," he said.

Be cautious, avoid herd behaviour

Kumar said while gold can help in diversification, investors should avoid going overboard.

"But something which is becoming so mainstream as a currency and which is held by so many individuals as well, that is leading me to think that yes, it is something which should be had for de-risking oneself but the basic character of gold doesn't change. It still does not produce anything, it still sits pretty," he added.

When asked if this is the right time to invest, he advised restraint.

"I would say that somebody should have some gold but make sure that it is some. It is not too much. Make sure that it is not exceeding 10 percent. Make sure it is not exceeding 5 percent," he said.

He also warned against blindly following market trends.

"Something which keeps going up will not keep going up simply because there will be averaging, there will be people who would like to book profit, there will be central bankers who will book profit. The worst time to buy something is when there is a complete consensus that the whole thing will only keep going up. And that's a very dangerous thing to do. So be careful, be cautious. Invest some in gold but don't get carried by this," he said.

Equity and fixed income should remain core

Reiterating his broader strategy, Kumar said, "Equity should remain mainstay. Fixed income should be mainstay and there should be a little bit of gold in an investment form so that you can invest it and realize it as and when you need it or rebalancing it."